How California Law May Let You Avoid Arbitration in Your Discrimination Case, Even If You Signed an Arbitration Agreement

Many times, employers will seek to resolve Fair Employment and Housing Act discrimination disputes through arbitration as opposed to litigation. They do this because they believe that the arbitration process will be cheaper than litigation and that the resolution will be more favorable than they would receive in court. For a multitude of reasons, you, as an employee, might prefer to present your case to a jury or judge, not an arbitration panel. The key, then, is avoiding being forced into arbitration, such as by a mandatory arbitration provision in your employment contract. For options on achieving these and other goals in your discrimination case, contact an experienced Oakland employment attorney.

Sometimes, there are ways to avoid arbitration even if you signed an arbitration agreement. Take the case of C.R. C.R., who would eventually become the plaintiff in the case, was someone who had amassed an impressive resume. She had a law degree from UC-Berkeley and a Ph.D. in biophysics from the same institution. Her experiences in the law and the sciences in the Bay Area allowed her to obtain a substantial position as a patent lawyer with a prestigious law firm in 2014. The attorney’s title was described as an “income partner.”

Shortly after she started work, she signed a partnership agreement. That agreement contained an arbitration provision in it that she was required to handle disputes first by submitting them to “mandatory, but non-binding, mediation.” If the dispute remained unresolved after 60 days, then either side could submit the dispute to binding arbitration.

Unfortunately, the employment arrangement was not a success. According to her complaint, C.R. was denied chances for professional advancement, refused compensation and bonuses that she deserved to receive and was evaluated based upon what happened with certain male partners at the firm instead of on her own merit. All this unfair treatment, she asserted, happened because she was a woman.

Unsurprisingly, the firm eventually tried to send the case to binding arbitration. The required 60-day time had elapsed and, based on the contract the attorney signed, the firm was entitled to demand arbitration, it argued.

The California Court of Appeal saw things differently, however, issuing a ruling in favor of the attorney. The firm was not entitled to demand arbitration because the arbitration provision that it and C.R. had signed was not enforceable under California law. The law in California is clear that, if an employee is asserting certain statutory claims, like discrimination claims under FEHA, an arbitration agreement must have (or not have) certain things in it to be enforceable. The agreement must not be “unconscionable” under California law. Specifically, “(1) the agreement must provide for neutral arbitrators, (2) the agreement may not limit remedies provided under the statute, (3) there must be sufficient discovery to adequately arbitrate the employee’s statutory claim, (4) there must be a written arbitration decision and judicial review sufficient to ensure the arbitrator complied with the statutory requirements, and (5) the employer must pay all costs unique to arbitration.”

In this case, there were several things wrong with the arbitration provision. It made the employee pay half the cost of arbitration, pay her own attorneys’ fees and restricted the power of arbitration panel in a way that potentially denied C.R. remedies that would’ve been available in court. All of those were things that were not compliant with California requirements. The agreement also contained a confidentiality clause that was non-compliant. All of these shortcomings, when taken together, made the arbitration provision unenforceable as a whole.

That meant that the employer wasn’t entitled to demand arbitration and C.R. was entitled to have her day in court on her claim of discrimination.

If you’ve been harmed by workplace discrimination, don’t remain silent and don’t go it alone. Call the Oakland employment attorneys at the Law Offices of Stephen M. Fuerch, who are here to help. We have spent many years to helping people impacted by illegal discrimination. To learn more about how we can help you, contact us through our website or call our office at (925) 463-1073 to schedule your confidential initial consultation today.